The Value of Transport Safety

Recent years have witnessed an increasing tendency for public sector and related agencies to reject the traditional but poorly founded "lost output" approach to the valuation of transport safety in favor of the altogether more defensible "willingness-to-pay" approach. The purpose of this paper is to examine some of the more significant implications of this revolution in the way in which transport safety is evaluated. In particular, the paper outlines the case in favor of the willingness-to-pay approach, summarizes the results of empirical work in this area and examines the allocative implications of adopting the kind of values that emerge from such empirical work. The paper then considers the extent to which road risks can be regarded as externalities, assesses the implications of asymmetries in the treatment of safety on various different transport modes in the U.K. and, finally, proposes an agenda for future research in the economics of transport safety.